Over the past week, the HALO trading strategy has gained significant traction, moving from Wall Street to the A-shares market. In an in-depth report dated February 24, Goldman Sachs elaborated on the HALO effect, noting that under the combined influence of higher real interest rates, geopolitical fragmentation, and supply chain restructuring, the core pricing logic of capital markets is shifting from narratives centered on "scalable light assets" to tangible, hard-to-replace physical production capacity and networks. In other words, investors are increasingly favoring stocks with the so-called "HALO effect," which are typically characterized by heavy asset investments and low risks of technological obsolescence, primarily concentrated in sectors such as utilities, basic resources, and energy.

Following the post-holiday resumption of work, the "HALO trade" widely discussed on Wall Street has also begun to influence the A-shares market. Over the past week, the combination of post-holiday work resumption and supply-side constraints, along with rising narratives around "anti-involution/price increases," has led resource-related sectors to lead gains in A-shares. According to the Shenwan industry index, steel and non-ferrous metals surged by 12.27% and 9.77%, respectively, while basic chemicals and environmental protection sectors rose by 7.15% and 6.96%. Coal, utilities, and petroleum and petrochemicals also saw gains exceeding 5%. Overall, market sentiment is gradually shifting towards upstream cyclical sectors, with noticeable upward trends in areas experiencing price increases, such as oil and gas, phosphate chemicals, precious metals, and rare earths.

In response, Lu Zhe, Chief Economist at Soochow Securities, interpreted these developments by noting that as the narrative of AI challenges the logic of ample liquidity, the market is beginning to question the profit margins and terminal value of software and IT services. The trend of internet giants heavily investing in capital expenditures for heavy-asset construction has shaken market confidence in "light assets." Consequently, the sectors involved in the recent market shift—such as power transmission networks, oil and gas pipelines, utilities, transportation infrastructure, critical equipment, and chemicals—are all products experiencing price increases under traditional supply-demand dynamics, even amid the AI narrative. Simultaneously, this theme also incorporates risk aversion and supply premiums arising from geopolitical tensions. The convergence of these two factors has facilitated a relatively smooth transition from growth-oriented styles to cyclical resource sectors.

The strategy team at Shenwan Hongyuan pointed out that the concentrated manifestation of the HALO trade indicates the market is beginning to collectively speculate on potential changes in industrial organization forms in the AI era. For companies in industries that may be replaced by AI, those whose competitive advantages may weaken in the AI era leading to compressed excess profits, and tech leaders that may no longer dominate, long-term expectations are being recalibrated, with downward pressure on valuation benchmarks. In comparison, China has fewer industrial segments enjoying monopoly barriers and excess profits than the United States, resulting in relatively lesser overall impact. At this stage, the market tends to extrapolate tech industry trends to their ultimate conclusions but often struggles to fully account for the inevitable gradual changes in other critical factors during AI advancement, such as productivity, production relations, and political systems. Therefore, when the market collectively prices in the potential impacts of an AI endgame, mispricing is inevitable.

Shenwan Hongyuan's strategy team further emphasized that against the backdrop of major power competition, self-sufficiency in strategic resources has always been a core investment theme. In the AI era, the "inflation" logic for strategic resources and energy may further intensify. "Computing infrastructure is the direction chosen by the market when implementing the HALO strategy, which emphasizes heavy assets and low obsolescence rates." From an asset allocation perspective, Liu Yu, Chief Economist at Huaxi Securities, noted that as the software sector faces challenges from AI application development, the market's understanding of AI is shifting from "which industries can AI help improve efficiency" to "which industries' business models might AI disrupt." This has brought traditional manufacturing and computing infrastructure into focus.

Further analysis reveals that the underlying logic of the HALO strategy is that AI will profoundly reshape industries and society, representing an endorsement rather than a rejection of the tech sector. Computing manufacturing and power energy, as infrastructure highly reliant on the AI industry, are high-quality directions for the HALO strategy. In particular, upstream segments of computing hardware are currently in a price increase cycle, and leading hardware manufacturers possess the ability to pass costs downstream, further fueling market speculation in the computing hardware sector. It is worth noting that while tech sectors are performing strongly, the crowding degree in TMT is approaching historical experience levels. According to calculations by Huaxi Securities Research Institute, as of the close on February 26, the TMT crowding degree stood at 37%, nearing the 40% historical benchmark. This indicates that market expectations for tech logic have become stringent, and any failure to meet these expectations could trigger significant capital outflows. If the trend accelerates and attracts more capital participation, short-term volatility in the tech sector may warrant attention.